Cannon Mountain...thoughts

[SIKSKIER]

Back on topic

So I'm trying to figure out how leasing Cannon makes one feel all tingly when making the argument that it puts unfair pressure on other resorts.The state still owns it and and will profit from it won't it?And if the infusion of private capital and management increase skier visits at the expense of other resorts,then they will certainly suffer more won't they?You can't have it both ways.

 

[bobbutts]

The thing that drew me to SR originally was their aggressive snowmaking and good conditions during poor snow years in the late 80's-90's via word of mouth.
I've returned because it's a good place to ski and I've always had a good time there.
The suggestion that the main attraction to it is brand name seems off to me.

 

[Cannonball]

Is it not interesting that, in the past 30 years, the three (now two) goverment areas have spent millions on building and expanding novice areas? Not including surface lifts (costing hundreds of thousands of taxpayer dollars per area), Cannon has installed a quad and two triples while Gunstock has installed a quad, a triple, and a double.

So, if King Ridge, Crotched, Highlands, Temple, and Tenney were all novice areas with novice skiers, couldn't one theorize the significant growth of government run novice areas significantly harmed these soon-to-be-closed privately owned and operated areas?

You may have misplaced your correlations and causations.

Another way of looking at this is to say that infrastructure improvements in any business help keep that business alive. Failure to improve leads to failure of an operation. So government run areas (C/S/G) AND private areas (Loon, WV, Wachusett, SR, K-mart, etc) that made smart improvements have survived and thrived while areas that didn't improve (see your list) failed.

In this sense, NH's long-term vision and business strategy of investing in improvements to Cannon so that it could survive and eventually grow to the point of making money was pretty smart. In fact it's consistent with smart private business strategies (Loon, etc) that have have continued to grow and succeed over the long term.

If NH had not funded improvements at Cannon do you think King Ridge, Crotched, Highlands, Temple, and Tenney would all still be in business?

 

[threecy]

So I'm trying to figure out how leasing Cannon makes one feel all tingly when making the argument that it puts unfair pressure on other resorts.The state still owns it and and will profit from it won't it?And if the infusion of private capital and management increase skier visits at the expense of other resorts,then they will certainly suffer more won't they?You can't have it both ways.

- NH taxpayers will be protected from bad snow years.
- The troubled parks division will be given two guaranteed sources of revenue (since the Sunapee lease payments would no longer be diverted into Cannon).
- NH taxpayers would no longer be called upon to provide millions of additional investments into Cannon.
- Private sector operator would pay state and local taxes (which currently are not paid), thus injecting even more money into the current budget issues.
- Private sector operator has to pay taxes and lease payments every year, thus making a more level playing field vs. fully privately owned and semi-privately owned ski areas.
- Private sector operator has to pay market rates for project financing, thus making a more level playing field vs. fully privately owned and semi privately owned ski areas.
- Private operator pays state as landlord, resulting in similar ownership structure as Loon, Sunapee, Waterville, Wildcat.

If NH had not funded improvements at Cannon do you think King Ridge, Crotched, Highlands, Temple, and Tenney would all still be in business?

If taxpayers hadn't been forced to back improvements at Cannon, Gunstock, and Sunapee for decades, then yes, I suspect less of those areas would have been forced out of business.

 

[deadheadskier]

threecy, you really should go into politics.

You're great at bulleted talking points

and very bad at answering questions. In this case, sikskier's.

 

[bigbob]

Threecy, I am sure the town of Franconia would love to collect property taxes off of Cannon.It would still be state owned land so I doubt they would be able to collect.
It was my understanding that as the state bonded money to pay for Cannon improvements, the Sunapee cash would pay the yearly bond payments. Untill the bonds are retired, payments would still have to be made.

 

[AdironRider]

- NH taxpayers will be protected from bad snow years.
- The troubled parks division will be given two guaranteed sources of revenue (since the Sunapee lease payments would no longer be diverted into Cannon).
- NH taxpayers would no longer be called upon to provide millions of additional investments into Cannon.
- Private sector operator would pay state and local taxes (which currently are not paid), thus injecting even more money into the current budget issues.
- Private sector operator has to pay taxes and lease payments every year, thus making a more level playing field vs. fully privately owned and semi-privately owned ski areas.
- Private sector operator has to pay market rates for project financing, thus making a more level playing field vs. fully privately owned and semi privately owned ski areas.
- Private operator pays state as landlord, resulting in similar ownership structure as Loon, Sunapee, Waterville, Wildcat.


If taxpayers hadn't been forced to back improvements at Cannon, Gunstock, and Sunapee for decades, then yes, I suspect less of those areas would have been forced out of business.

I love how you argue that Cannon gets special deals on stuff and doesnt pay market rates, when just last year we had a 30 page thread where you were bitching that they were paying to much for the Mitt lift arguing that it was way above what private resorts would pay. Doesnt really mesh well with your whole argument that Cannon and other state run resorts are making it unfair to other private resorts due to getting special deals now does it? Pick a side, not just cherry pick blanket statement arguments as you see fit.

Also, Im pretty sure Cannon uses their revenues to pay for investments in capital improvements. Taxpayers might cover the loss (which there hasnt been recently) if the yearly revenue doesnt cover everything, but its poor form to say we cover all costs for every dime put into the place but never see a cent back. You and I both know that is not true. Taxpayers are not on the hook for millions, more like on the hook for a possibility of a loss in any given year.

 

[jack97]

threecy, you really should go into politics.

You're great at bulleted talking points

and very bad at answering questions. In this case, sikskier's.

yep......I lost track of what he was arguing about.

 

[Puck it]

I think they spent too much on a chairlift.

 

[UVSHTSTRM]

- NH taxpayers will be protected from bad snow years.
- The troubled parks division will be given two guaranteed sources of revenue (since the Sunapee lease payments would no longer be diverted into Cannon).
- NH taxpayers would no longer be called upon to provide millions of additional investments into Cannon.
- Private sector operator would pay state and local taxes (which currently are not paid), thus injecting even more money into the current budget issues.
- Private sector operator has to pay taxes and lease payments every year, thus making a more level playing field vs. fully privately owned and semi-privately owned ski areas.
- Private sector operator has to pay market rates for project financing, thus making a more level playing field vs. fully privately owned and semi privately owned ski areas.
- Private operator pays state as landlord, resulting in similar ownership structure as Loon, Sunapee, Waterville, Wildcat.


If taxpayers hadn't been forced to back improvements at Cannon, Gunstock, and Sunapee for decades, then yes, I suspect less of those areas would have been forced out of business.

I could care less one way or the other, but let me ask you this. With everything you mentioned above, why would a private company buy this place? You basically said without tax funds this place is a lemon so to speak. What could a private sector business do to create enough of a profit to pay for all the above things you mention? I hate to say it, but Cannon really can't do anymore then what is in place now. Perhaps adding some snowmaking? They have good lifts now, good snowmaking, good trails, above average (so they report) snowfall for NH and parts of Maine. Cannon is big, but can it handle 300,000 skier visits, does it have the things or could it ever have the things in place to support and attract the numbers of people required to keep this place afloat......ie slopeside condos, bars restaraunts, etc.? Would state and federal land regulations allow this to happen?

 

[MadPadraic]

I never made that argument. I'm not sure where you're coming up with that.

This is where I came up with it:

Ah, so Sunday River is big for having multiple pods, but Crotched, Temple, and King Ridge weren't.

Not quite. Cannon is injected with hundreds of thousands of dollars of Sunapee lease revenue every year. Large projects, which would drag down private ski area income statements, are taken care of by taxpayer backed low interest bonds.

So many things wrong with this statement: first off, and YOU know this, the projects themselves don't show up as in one giant chunk on the income statement. Expenses are recognized over time (clearly interest is part of this)."

Big corporate ski areas finance improvements with debt (the 8-10% notes at Crotched and Mt Snow are much higher than Vail's cost to borrow). Ski companies use revenues from one area to improve other areas. That's not dissimilar from using Sunapee revenue to improve Cannon or from using the state's credit rating to improve the public good.

Also, even if the borrowing rates are low, if the ski operations pay them off, then it's not like it is a net drain on the state's residents. In other words, they aren't subsidized.

But if Cannon borrows at lower rates, and it then passes on the savings to its patrons, then I'm happy. But elsewhere, you've argued that Cannon overpayed for their expansion. Which is it? Are they undercutting the competition by having a lower cost to expand, or are they fleasing the state's residents by overpaying for expansion? It can't be both.

 

[MadPadraic]

- NH taxpayers will be protected from bad snow years.

This is the case anyway, I simply pay less in taxes to NH during bad snow years.

- The troubled parks division will be given two guaranteed sources of revenue (since the Sunapee lease payments would no longer be diverted into Cannon).

Since when is it troubled? That's a real question, not rhetorical.

- NH taxpayers would no longer be called upon to provide millions of additional investments into Cannon.

They aren't now, so how would that change anything?

- Private sector operator has to pay taxes and lease payments every year, thus making a more level playing field vs. fully privately owned and semi-privately owned ski areas.

So what? Private ski areas are all ready able to charge plenty. Why do I want them to charge even more?

- Private sector operator has to pay market rates for project financing, thus making a more level playing field vs. fully privately owned and semi privately owned ski areas.

Let's be very clear on this particular point, you are advocating a direct transfer of wealth from skiers to wall street banks. I see this as undesirable.

 

[threecy]

Threecy, I am sure the town of Franconia would love to collect property taxes off of Cannon.It would still be state owned land so I doubt they would be able to collect.

Sunapee indeed pays local taxes. I believe the figure cited through 2006 was about $835,000

I love how you argue that Cannon gets special deals on stuff and doesnt pay market rates, when just last year we had a 30 page thread where you were bitching that they were paying to much for the Mitt lift arguing that it was way above what private resorts would pay.

Do you seriously not understand this? Cannon paid a premium for the Mittersill chairlift, courtesy below market debt backed by taxpayers.

I could care less one way or the other, but let me ask you this. With everything you mentioned above, why would a private company buy this place? You basically said without tax funds this place is a lemon so to speak. What could a private sector business do to create enough of a profit to pay for all the above things you mention? I hate to say it, but Cannon really can't do anymore then what is in place now. Perhaps adding some snowmaking? They have good lifts now, good snowmaking, good trails, above average (so they report) snowfall for NH and parts of Maine. Cannon is big, but can it handle 300,000 skier visits, does it have the things or could it ever have the things in place to support and attract the numbers of people required to keep this place afloat......ie slopeside condos, bars restaraunts, etc.? Would state and federal land regulations allow this to happen?

The area is operated as a government institution, with government fiscal budgeting, bidding requirements, etc. It's simply not an efficient way to operate an area. There are indeed private sector firms interested in leasing Cannon.

Also, even if the borrowing rates are low, if the ski operations pay them off, then it's not like it is a net drain on the state's residents.

Even if the bonds are paid off, it's still absolutely a drain on state residents - it ties up taxpayer funds. New Hampshire is staring at deficits and debt - why allocate debt to an alpine ski area that most New Hampshire residents will never use?

But elsewhere, you've argued that Cannon overpayed for their expansion. Which is it? Are they undercutting the competition by having a lower cost to expand, or are they fleasing the state's residents by overpaying for expansion? It can't be both.

They absolutely have a lower cost to expand - $0. A privately owned ski area operator has to pay out of pocket to expand. If a private sector owner dramatically overpays, they go bankrupt and lose their area. If the government run ski area overpays, the government still pays for it.

This is the case anyway, I simply pay less in taxes to NH during bad snow years.


Since when is it troubled? That's a real question, not rhetorical.

The parks division has been carrying losses over (division wide) for awhile. Since they legally are supposed to be budget neutral, they carry the losses over into the next year's budget. A bad snow year means they carry an even larger deficit into the following budget. In theory, they get away with being in the red, but it does mean other parts of the division are harmed as a result.

They aren't now, so how would that change anything?

Yes, we are.

So what? Private ski areas are all ready able to charge plenty. Why do I want them to charge even more?

That's an odd conclusion to draw.

Let's be very clear on this particular point, you are advocating a direct transfer of wealth from skiers to wall street banks. I see this as undesirable.

What in the world are you talking about?

 

[BLESS]

this thread delivers. One more reason why I dont understand the no polotics/religion rule...or whatever it is. We've had a 33+ page civil discussion on Cannon....no death threats, etc. Why not be able to have more like this?

 

[Puck it]

 

[Northernflight]

The parks division has been carrying losses over (division wide) for awhile.

Can you post the data to back that statement up? The previous data a few pages back showed that most parks were operating above deficit.

 

[threecy]

Can you post the data to back that statement up? The previous data a few pages back showed that most parks were operating above deficit.

This is a year old, but: http://newhampshire.watchdog.org/5168/dred-pushing-park-fee-increases/

Austin and Bald state that the Park Fund faced a deficit of over $1.8 million as of the beginning of Fiscal Year 2009. Under state law, the Park System is expected “to recover a reasonable portion of budget expenses”, but does not have to be self-sustaining.

 

[deadheadskier]

I'm not going to search through 33 pages, but I could have sworn you said earlier in the thread that by law NH State Parks can't run in the red.

 

[Puck it]

 

[threecy]

I'm not going to search through 33 pages, but I could have sworn you said earlier in the thread that by law NH State Parks can't run in the red.

There's no law that says they can't carry a deficit forward in the following budget, at least that I'm aware of.